Replay Inc. v. Sec'y of The Treasury of P.R.

• Decision Date: 19 April 2011
• Docket Number: Civil No. 10–1529 (SEC).
• Citation: 778 F.Supp.2d 207
• Parties: REPLAY, INC. et al., Plaintiffsv.SECRETARY OF the TREASURY OF PUERTO RICO, et al., Defendants.
• Court: U.S. District Court — District of Puerto Rico

778 F.Supp.2d 207

REPLAY, INC. et al., Plaintiffs

v.SECRETARY OF the TREASURY OF PUERTO RICO, et al., Defendants.

Civil No. 10–1529 (SEC).

United States District Court, D. Puerto Rico.

April 19, 2011.

Harold A. Frye–Maldonado, San Juan, PR, for Plaintiffs.Lumy Mangual–Mangual, P.R. Department of Justice—Federal Litigation, San Juan, PR, for Defendants.

OPINION AND ORDER

SALVADOR E. CASELLAS, Senior District Judge.

Pending before this Court is Defendant Secretary of the Treasury, Juan Carlos Puig's (“Defendant”) motion to dismiss (Docket # 13), and Plaintiffs' Replay, Inc. et al.'s (“Plaintiffs”) opposition thereto (Docket # 16). After reviewing the filings, and the applicable law, Defendant's motion is GRANTED in part and DENIED in part.

Factual and Procedural Background

On September 22, 2010, Plaintiffs filed suit against Defendant in his official and individual capacity, among other defendants, seeking damages, declaratory and injunctive relief pursuant to 42 U.S.C. § 1983 and several state laws, alleging violations to their rights under Fourth, Fifth and Fourteenth Amendments to the U.S. Constitution and Article II, Sections 7, ¹ 8,² 9,³ 10 ⁴ and 19 ⁵ of the Constitution of the Commonwealth of Puerto Rico. Docket # 5. According to the complaint, Defendant cancelled the licenses and seized some video entertainment machines owned by Plaintiffs and located in different establishments throughout Puerto Rico without a search warrant or probable cause. Plaintiffs further aver that Defendant failed to provide adequate pre and post-deprivation remedies, in violation of their constitutional rights.

On December 15, 2010, Defendant moved to dismiss the complaint for failure to state a claim. Docket # 13. He further contends that he is entitled to Eleventh Amendment immunity. Plaintiffs opposed, arguing that the complaint clearly sets forth an entitlement to relief. Moreover, they posit that Defendant is not entitled to Eleventh Amendment immunity in his personal capacity.

Standard of ReviewFed.R.Civ.P. 12(b)(6)

To survive a Rule 12(b)(6) motion, Plaintiffs' “well-pleaded facts must possess enough heft to show that [they are] entitled to relief.” Clark v. Boscher, 514 F.3d 107, 112 (1st Cir.2008).⁶ In evaluating whether Plaintiffs are entitled to relief, the court must accept as true all of their “well-pleaded facts [and indulge] all reasonable inferences therefrom” in the plaintiff's favor. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). The First Circuit has held that “dismissal for failure to state a claim is appropriate if the complaint fails to set forth factual allegations, either direct or inferential, respecting each material element necessary to sustain recovery under some actionable legal theory.” Gagliardi v. Sullivan, 513 F.3d 301, 305 (1st Cir.2008). Courts “may augment the facts in the complaint by reference to documents annexed to the complaint or fairly incorporated into it, and matters susceptible to judicial notice.” Id. at 305–306. However, in judging the sufficiency of a complaint, courts must “differentiate between well-pleaded facts, on the one hand, and ‘bald assertions, unsupportable conclusions, periphrastic circumlocution, and the like,’ on the other hand; the former must be credited, but the latter can safely be ignored.” LaChapelle v. Berkshire Life Ins., 142 F.3d 507, 508 ( quoting Aulson v. Blanchard, 83 F.3d 1, 3 (1st Cir.1996)); Buck v. American Airlines, Inc., 476 F.3d 29, 33 (1st Cir.2007); see also Rogan v. Menino, 175 F.3d 75, 77 (1st Cir.1999). Thus Plaintiffs must rely in more than unsupported conclusions or interpretations of law, as these will be rejected. Berner v. Delahanty, 129 F.3d 20, 25 (1st Cir.1997) (citing Gooley v. Mobil Oil Corp., 851 F.2d 513, 515 (1st Cir.1988)).

Therefore, “even under the liberal pleading standards of Federal Rule of Civil Procedure 8, the Supreme Court has recently held that to survive a motion to dismiss, a complaint must allege ‘a plausible entitlement to relief.’ ” Rodríguez–Ortíz v. Margo Caribe, Inc., 490 F.3d 92 (1st Cir.2007) (citing Twombly, 550 U.S. at 559, 127 S.Ct. 1955). Although complaints do not need detailed factual allegations, the plausibility standard is not akin to a “probability requirement,” but it asks for more than a sheer possibility that a defendant has acted unlawfully. Twombly, 550 U.S. at 556, 127 S.Ct. 1955.

In Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009), the Supreme Court upheld Twombly and clarified that two underlying principles must guide this Court's assessment of the adequacy of a plaintiff's pleadings when evaluating whether a complaint can survive a Rule 12(b)(6) motion. See Iqbal, 129 S.Ct. at 1949–50. First, the court must identify any conclusory allegations in the complaint as such allegations are not entitled to an assumption of truth. Id. at 1949. Specifically, the court is not obligated to accept legal conclusions set forth as factual allegations in the complaint. Moreover, “threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. (citing Twombly, 550 U.S. at 555, 127 S.Ct. 1955). Second, a complaint survives only if it states a plausible claim for relief. Id. (citing Twombly, 550 U.S. at 556, 127 S.Ct. 1955). Thus, any nonconclusory factual allegations in the complaint, accepted as true, must be sufficient to give the claim facial plausibility. Id. A claim has facial plausibility when the pleaded facts allow the court to reasonably infer that the defendant is liable for the specific misconduct alleged. Id. at 1949, 1952. Such inferences must be more than a sheer possibility and at least as plausible as any obvious alternative explanation. Id. at 1949, 1951. Plausibility is a context-specific determination that requires the court to draw on its judicial experience and common sense. Id. at 1950.

Therefore, a plaintiff's obligation to “provide the ‘grounds' of his ‘entitle [ment] to relief’ requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Id. (citing Twombly, 550 U.S. at 555, 127 S.Ct. 1955). That is, “factual allegations must be enough to raise a right to relief above the speculative level, on the assumption that all allegations in the complaint are true.” Parker v. Hurley, 514 F.3d 87, 95 (1st Cir.2008). In fulfilling this task, courts “may augment the facts in the complaint by reference to documents annexed to the complaint or fairly incorporated into it, and matters susceptible to judicial notice.” Gagliardi v. Sullivan, 513 F.3d 301, 305–06 (1st Cir.2008).

Applicable Law and AnalysisEleventh Amendment immunity

Defendant posits that the claims against him in his official capacity are barred by Eleventh Amendment immunity. The Eleventh Amendment to the United States Constitution provides:

[t]he Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State. U.S. Const. Am. XI.⁷

Although the Eleventh Amendment literally seems to apply only to suits against a State by citizens of another State, the Supreme Court has consistently extended the scope of this Amendment to suits by citizens against their own State. See Board of Trustees of the Univ. of Ala. v. Garrett, 531 U.S. 356, 362, 121 S.Ct. 955, 148 L.Ed.2d 866 (2001); see also Kimel v. Fla. Bd. of Regents, 528 U.S. 62, 72–73, 120 S.Ct. 631, 145 L.Ed.2d 522 (2000); Hans v. Louisiana, 134 U.S. 1, 15, 10 S.Ct. 504, 33 L.Ed. 842 (1890). Although the Commonwealth of Puerto Rico is not a state, it enjoys the protection of the Eleventh Amendment. See Jusino Mercado v. Commonwealth of Puerto Rico, 214 F.3d 34, 37 (1st Cir.2000); Ortiz–Feliciano v. Toledo–Dávila, 175 F.3d 37, 39 (1st Cir.1999); Futura Development v. Estado Libre Asociado, 144 F.3d 7, 12–13 (1st Cir.1998); Culebras Enters. Corp. v. Rivera Ríos, 813 F.2d 506, 516 (1st Cir.1987); Ramírez v. Puerto Rico Fire Serv., 715 F.2d 694, 697 (1st Cir.1984). The Eleventh Amendment bar also extends to governmental instrumentalities which are an arm or “alter ego” of the State.⁸See Ainsworth Aristocrat Int'l Pty. Ltd. v. Tourism Co. of P.R., 818 F.2d 1034, 1036 (1st Cir.1987); Ochoa Realty Corp. v. Faría, 618 F.Supp. 434, 435 (D.P.R.1985); Pennhurst State Sch. Hosp. v. Halderman, 465 U.S. 89, 100, 104 S.Ct. 900, 79 L.Ed.2d 67 (1984); Mt. Healthy City Sch. Dist. v. Doyle, 429 U.S. 274, 280–281, 97 S.Ct. 568, 50 L.Ed.2d 471 (1977); Ursulich v. P.R. Nat'l Guard, 384 F.Supp. 736, 737–38 (D.P.R.1974).

Eleventh Amendment immunity also protects state officials in their official capacity. The rationale behind this extension of the Eleventh Amendment protection is that a claim against a state official in his or her official capacity for monetary relief is an action for the recovery of money from the State. Ford Motor v. Dept. of Treasury, 323 U.S. 459, 65 S.Ct. 347, 89 L.Ed. 389 (1945); Will v. Michigan Dept. of State Police, 491 U.S. 58, 71, 109 S.Ct. 2304, 105 L.Ed.2d 45 (1989). Hence, a claim against a state official in his official capacity for monetary relief is, in essence, a claim against the State. As such, all damages claims against Defendant in his official capacity are DISMISSED with prejudice.

Notwithstanding, albeit it is well settled that the Eleventh Amendment bars suits for monetary damages against a state and its officers, it does not preclude claims for prospective equitable relief. See Ex Parte Young, 209 U.S. 123, 155–56, 28 S.Ct. 441, 52 L.Ed. 714 (1908); Nieves–Márquez v. Commonwealth of Puerto Rico, 353 F.3d 108, 123 (1st Cir.2003). “The Ex Parte Young doctrine permits suits to proceed against state officers in their official capacities to compel them to comply with federal law.” Vaqueria Tres Monjitas,...